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Swedish SEB Bank Risks Billions in Credit Losses

Reports Nasdaq. - 4 Billion in losses?

byke
post 15.Nov.2012, 11:00 AM
Post #1
Location: Europe
Joined: 28.Oct.2008

A very interesting look at EU consumer protection laws which could hit the Swedish bank very hard.
Interesting to read that so many consumers choose to purchase their SAS tickets through SEB.
I wonder what would happen if SEB decided to reduce its risk with said airline and posed restrictions regards to payments made for services with SAS ?

http://www.nasdaq.com/article/seb-risks-bi...62#.UKS376Xy9lI
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Yorkshireman
post 15.Nov.2012, 11:19 AM
Post #2
Joined: 22.Nov.2011

It has nothing to do with EU consumer law.

As said in an earlier thread, it is a Global agreement that exists between Credit Card companies and Banks. If You buy something with a credit card, regardless if online or not, and You do not receive what you paid for with the card, you complain to the credit card company ... they go direct to the bank that they paid, and that bank then has 10 days (or so) to get the company who is their customer to prove that you did get what you paid for. If the bank cannot prove that to the credit card company, the bank is liable to repay the credit card company, that then creidts you back. It is up to the bank to then try to recover the monies itself from their customer (the company), if the company has funds, they debit the account immediately without needing permission, if the company is insolvent then the bank takes the loss.

This is why it is better to buy something with a credit card wink.gif
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Essingen
post 15.Nov.2012, 11:23 AM
Post #3
Joined: 2.Nov.2008

Not sure if SEB really in a position to do that. The problem arises because SEB ends up with all the ticket liability, even if they are bought on the credit card of another bank, due to the nature of services they have sold to SAS.
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Mib
post 15.Nov.2012, 12:21 PM
Post #4
Joined: 7.Jul.2006

QUOTE (Yorkshireman @ 15.Nov.2012, 12:19 PM) *
It has nothing to do with EU consumer law. As said in an earlier thread, it is a Global agreement that exists between Credit Card companies and Banks. If You buy something wit ... (show full quote)

In the UK, I have seen that it only applies to purchases at £100 or more in terms of protection via a credit card payment. Is that just a UK thing or global? If I buy something online for 100kr, would that still be covered? It seems not in the UK if I spent £10.
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Yorkshireman
post 15.Nov.2012, 03:49 PM
Post #5
Joined: 22.Nov.2011

In the UK, that is the Consumer Credit Act that is written into Law with regards the minimum £100-£30000 range. One thing to remember with that is it does not mean you have to have paid the entire amount on the card, if you buy something that is £101, paid £5 on the card, and £96 cash or other means... You are still covered by the rules, because part of the payment is made on the item by the card, and the item was valued > £100

What I mean is not written into Consumer Credit Law, it is an agreement for Chargeback that Banks and Credit Card companies have signed. That covers any amount. What You need to do in order to start the chargeback process is establish that there has been a breach-of-contract, eg. You bought something and it wasn't delivered, and then the cridt card company will do the rest.

It has become more common though that the Credit Card companies try to avoid the process, but it is just to push them a little wink.gif
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Mib
post 15.Nov.2012, 06:20 PM
Post #6
Joined: 7.Jul.2006

Thanks Yorkshireman! You're a hub for some really good information! Can you predit the future? smile.gif
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